Correlation Between Platinum Group and Gold79 Mines
Can any of the company-specific risk be diversified away by investing in both Platinum Group and Gold79 Mines at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Platinum Group and Gold79 Mines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Platinum Group Metals and Gold79 Mines, you can compare the effects of market volatilities on Platinum Group and Gold79 Mines and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Platinum Group with a short position of Gold79 Mines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Platinum Group and Gold79 Mines.
Diversification Opportunities for Platinum Group and Gold79 Mines
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Platinum and Gold79 is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Group Metals and Gold79 Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold79 Mines and Platinum Group is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Platinum Group Metals are associated (or correlated) with Gold79 Mines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold79 Mines has no effect on the direction of Platinum Group i.e., Platinum Group and Gold79 Mines go up and down completely randomly.
Pair Corralation between Platinum Group and Gold79 Mines
Considering the 90-day investment horizon Platinum Group Metals is not expected to generate positive returns. Moreover, Platinum Group is 1.46 times more volatile than Gold79 Mines. It trades away all of its potential returns to assume current level of volatility. Gold79 Mines is currently generating about 0.14 per unit of risk. If you would invest 22.00 in Gold79 Mines on September 2, 2024 and sell it today you would earn a total of 2.00 from holding Gold79 Mines or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Platinum Group Metals vs. Gold79 Mines
Performance |
| Timeline |
| Platinum Group Metals |
| Gold79 Mines |
Platinum Group and Gold79 Mines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Platinum Group and Gold79 Mines
The main advantage of trading using opposite Platinum Group and Gold79 Mines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Platinum Group position performs unexpectedly, Gold79 Mines can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Gold79 Mines will offset losses from the drop in Gold79 Mines' long position.| Platinum Group vs. Endeavour Silver Corp | Platinum Group vs. Avino Silver Gold | Platinum Group vs. Fortuna Silver Mines | Platinum Group vs. Impala Platinum Holdings |
| Gold79 Mines vs. South32 Limited | Gold79 Mines vs. NioCorp Developments Ltd | Gold79 Mines vs. HUMANA INC | Gold79 Mines vs. SCOR PK |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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